Now, I would like to turn the call over to Efraim Grinberg, Chairman and Chief Executive Officer of Movado Group.

Thank you, Allison. Good morning, and welcome to Movado Group's first quarter earnings call. I am joined today by Sally DeMarcellus, our Executive Vice President and CFO. I will first review our first quarter results our progress against our strategic initiatives. Sally will then review our financial results in greater detail. We would then be glad to take questions. We are pleased by our performance in the first quarter. Especially as it involved navigating through an increasingly uncertain global economic environment. For the quarter, we delivered sales of $131,800,000 versus $134,400,000 last year. Down 1.9% or 1% on a constant currency basis. Our adjusted operating income for the first quarter of fiscal twenty twenty six was $870,000 versus operating income of $2,100,000 last year. We made good progress on reducing our operating expenses through our cost savings initiatives although some of the benefits were offset by unrealized losses due to significant currency fluctuations. Our adjusted earnings per share for the quarter were $0.8 down slightly from $09 last year on a lower tax rate. We ended the quarter with $2.00 $3,000,000 in cash and no debt. We are pleased that our Board approved a dividend of $0.35 per share for the first quarter.

Despite an uncertain retail environment, we continue to execute on our strategic priorities. Introducing product innovation and delivering compelling value for our consumers worldwide. For the first quarter, our U. S. Sales were down 1.6% while international sales were down 2.2% or 0.7% on a constant currency basis. We continue to make meaningful progress on our Movado brand refresh, even as we navigate a challenged retail environment We're particularly pleased with the recent introduction of our new Mini BANGL collections and the Bold Mini Quest. Which have received a strong consumer response. These new styles opening at $750 and $95 respectively are helping to elevate the brand positioning and broaden our reach. Additionally, the amplification of our partnership with Movado brand Ambassador and NBA star Tyrese Halliburton, who is currently making a standout playoff run has further enhanced our visibility. We have been utilizing social media campaigns leveraging both influencers and dynamic content across Instagram and TikTok. To connect with our target consumers and strengthen engagement with more to come this year. In our licensed brands, we have seen particularly strong growth with sales improving by high high single digits. Coach continues to connect with Gen Z and millennials. Particularly through our Sammy and Cass collections.

Our Charter Chronograph Collection is expanding the penetration of our men's offerings. In Hugo Boss, we continue to drive improving performance with the success of the Sky Traveler family for him and the Lucy collection for her. While continuing to grow our BOSS jewelry business. Lacoste continues to grow with the continued success of LC-thirty three. The Lacoste Boston family and our best selling Metropole bracelet from our jewelry collection. In Calvin Klein, we're focusing on driving our women's business with our iconic Pulse collection and a newly launched Meridian family a new mini rectangular shaped watch. We're also seeing a strong response to our new elongated drop collection in CK Jewelry. In Tommy Hilfiger, we have seen success in our Skeleton Watch product families, led by the Baker Watch, while our Bang Chronograph, an iconic Tommy Hilfiger colors is also performing well. And for women, we have seen a strong response to the new TSQ watch and will be expanding introductions throughout the year. In Olivia Burton, we have seen strong trends in The U. S. And The UK. With consumers responding to our shape cases like our iconic Grosvenor now available in a mini execution and our Grove family.

For the quarter, we saw an improved trend in our outlet division, with sales only down 1.7% and that improvement has continued into the second quarter with trends improving throughout the month of May. As we progress through the current quarter and position ourselves for the second half, we are seeing some positive signs while continuing to navigate a retail and economic environment affected by tariff related uncertainties. At the current temporary U. S. Tariff rates, we believe we can partially mitigate the associated cost increases through available levers including selective price increases. However, we recognize that the current tariff rates are subject to change based upon pending pending trade negotiations legal challenges. Given the global uncertainty, we are focused on managing the controllables and operating with a high level of flexibility and agility while staying focused on delivering innovation quality and value for our consumers. Due to the macroeconomic and tariff related uncertainty, we're not providing outlook at this time. Still, we see resilience in the category with young consumers embracing trend forward watches and jewelry. Across our portfolio, we have seen strong momentum in women's watch collections and men's jewelry offerings. Both of which are helping to drive engagement and growth.

I would now like to turn the call over to Sally to walk you through the financials in greater detail. We would then be glad to answer any of the questions you might have.

Thank you, Efraim, and good morning, everyone.

For today's call, I will review our financial results for the first quarter of fiscal twenty twenty six. My comments today will focus on adjusted results. Please refer to the description of the special item included in our results for the first quarter of fiscal twenty twenty six in our press release issued earlier today, which also includes a reconciliation table of GAAP and non GAAP measures. Overall, we are pleased with our performance for the first quarter of fiscal twenty twenty six, Although results continue to be negatively impacted, by an uncertain economic environment. Despite net sales being down low single digits year over year, we continued to make good progress on our strategic initiatives and maintained an extremely strong balance sheet.

Turning to a review of the quarter. Sales were 131,800,000.0 as compared to $134,400,000 last year. A decrease of 1.9%. In constant dollars, the decrease in sales was 1%. Net sales decreased across owned brands to a lesser extent, company stores, partially offset by an increase in licensed brands. By geography, U. S. Net sales decreased 1.6% as compared to the first quarter of last year. International net sales decreased 2.2% and on a constant currency basis, international net sales decreased point 7%. Gross profit as a percent of sales was 54.1%, compared to 54.3% in the first quarter of last year. The year over year decrease in the gross margin rate was primarily driven by a negative impact of fluctuations in foreign currency exchange rates, increased shipping costs, and the deleverage of certain fixed costs over lower sales. This was mostly offset by favorable channel and product mix. Operating expenses were $70,500,000 as compared to $70,800,000 for the same period of last year. During the quarter, we made progress on our cost savings initiatives, such as reducing our investment and marketing expenditures and payroll related costs. These savings, however, were partially offset by unrealized currency losses resulting from highly volatile exchange rates towards the end of the quarter.

Impacting our outstanding intercompany balances. And an increase in performance based compensation. Operating income decreased to $900,000 as compared to $2,100,000 in the first quarter of fiscal twenty twenty five. We recorded approximately $1,600,000 of other non operating income in the first quarter of fiscal twenty twenty six, which was primarily comprised of interest earned on our global cash position. As compared to $2,100,000 during the same period of last year. We recorded income tax expense of $800,000 the first quarter of fiscal twenty twenty six as compared to $2,000,000 in the first quarter of fiscal twenty twenty five. Net income in the first quarter was $1,900,000 or $08 per diluted share as compared to $2,000,000 or $09 per diluted share in the year ago period. Now turning to our balance sheet. Cash at the end of the first quarter was $203,100,000 as compared to $225,400,000 at the same period of last year. Accounts receivable was $87,300,000 as compared to $81,000,000 for the same period of last year due to timing and mix of business. Inventory at the end of the quarter was up $24,100,000 from the same period of last year due to the timing of receipts. In the first three months of fiscal twenty twenty six, capital expenditures were $1,500,000 We did not repurchase shares under our $50,000,000 share repurchase program during the quarter.

As a global company with over 40% of our net sales in The U. S, we continue to closely monitor the changing tariff landscape and evaluate various strategies to mitigate impending cost increases for U. S. Imports. Although we remain focused on maintaining the quality and value consumers expect, we will be implementing select price increases while actively engaging with our supply chain partners and customers respond effectively. Given the current macroeconomic environment and the ongoing uncertainty of the impact of tariffs on our business, the company has elected to not provide fiscal twenty twenty six outlook at this time. I would now like to open the call up for questions.

Thank you. Our first question is from Hamed Khorsand with BWS Financial. Please proceed.

Hi. Good morning. Just firstly, if we could just talk about the sales momentum. Could you just provide a little bit more insight the momentum you were talking about last quarter and the trends you're seeing now. And how that isn't really showing up in the actual numbers you're reporting and what's driving that?

Well, I think, and I think we've been clear that the sales are vary by market and by brand and we're seeing pockets of growth and then pockets of more challenged marketplaces. So I think overall given the uncertainty in the marketplace and the retail environment, I think we're satisfied right now with where our sales are, but we're focused on improving the trends over the balance of the year. [indiscernible] uncertainties that have been injected into the marketplace over the last several months certainly have taken some toll on consumers especially in The United States and Europe.

I guess what I'm trying to get to is like you implemented this marketing strategy last year to increase sales momentum. It seemed like things were going great. Is tariffs that much of an impact on the consumer as far as your markets are concerned?

Well, think that we never expected the journey that we implemented to be short term strategy, but a longer term and I think we're seeing a lot of interest from consumers in newness, in innovation, in smaller watch We're seeing a renewed interest from younger consumers. So I think those are positive things. I think the challenges are that discretionary purchases are challenged. And value still continues to be really important. So we are focused on on delivering value for our consumers. And I say that this journey that we're on from brand building perspective that doesn't happen overnight. And what we are doing this year is rationalizing our expense infrastructure to deliver better financial performance over the year. And that was going to be my segue there. When will there be lining up between earnings per share and the cash dividend? I mean, are still lagging the dividend right now.

I think the benefit that we is that we obviously have a very strong balance sheet and a really strong cash position. We've built inventory over the quarter. I would expect that to come down by the end of the year, which produces more cash. Also in very focused and always have been on delivering strong operating cash flow. I would think that as we go towards the second half of the year, we'll see improved operating cash flow and that should ultimately continue to strengthen our balance sheet. I think more difficult part right now is that it's difficult to predict the current economic environment. We saw last night even that the current tariffs were ruled illegal by the trade court, which is a federal court. So that in itself, although that's probably a positive from a business perspective, if it holds that creates even more uncertainty.

Okay, and then lastly, you were talking about this unrealized loss in the foreign exchange. Will that be realized as a loss or will that eventually be neutralized in some way?

Yes, so that resulted from a sharp decline really in the value of the U. S. Dollar at the end of the quarter. Due to headlines that hit really out of Washington. So it was unrealized. It will be we will make sure that we mitigate that risk going forward and take advantage of any other maybe offsetting increases in future quarters. So it will only be realized when paid basically, it's because we are such a multi multinational company. And have currency situations and interactions between all of our entities around the globe. [indiscernible] thank you.

That will conclude our question and answer session. I would like to turn the conference back over to Efraim for closing remarks.

Thank you all for participating with us today and we look forward to talking with you after our second quarter. Thank you again.

Thank you. This will conclude today's conference. You may disconnect your lines at this time and thank you for your participation.